Bob Jacobsen wasn't ready to retire when, in his mid-50s, he sold Wings of Alaska to a Portland start-up company. But after nearly three decades in the air transport business, he was ready to do something else.
That something is shaping up to be a fight for his financial future against Portland businessman John Beardsley, whose real estate fortune imploded under the weight of millions in debt and a bad market.
Jacobsen and his partners - four family members and a long-time business partner - are suing Beardsley and his company, SeaPort Air Group, for breach of a 2008 contract agreement to purchase Wings of Alaska.
The commuter airline is northern Southeast's only regularly scheduled air connection among itsvillages.
Beardsley quit making payments in August on $1.5 million owed for the Wings hangar at Juneau International Airport, according to a complaint filed in Juneau court Nov. 9 by Jacobsen and his partners, Wings Airline Services.
Beardsley paid an additional $750,000 for Wings and its operating certificates, which he and his partners needed to launch the Portland-based start-up, SeaPort Airlines. He agreed to pay for the hangar through his primary company, Fountain Village Development, according to the complaint.
Beardsley, a real estate developer with an affinity for Portland's historic downtown buildings, put Fountain Village Development into Chapter 11 bankruptcy on Nov. 23 to save the Jazz de Opus club, a small storefront where tenants are a strip club and a tattoo parlor, according to a story in The Oregonian. He owed about $1.5 million on the former jazz club.
Wings Airline Services financed a large portion of the sale to Beardsley and his airline. The bankruptcy means Jacobsen and his partners, which include his wife, Darlene, get in line for payment. Bob Jacobsen said he's trying to maintain optimism about the future.
"It's frightening to think that all of these years of investment could be lost," he said.
Wings of Alaska started in 1982 with a couple of airplanes and a half-dozen employees. Family and friends were involved from the beginning, starting with Jacobsen's mother in the accounting office. Both of his parents, his four siblings, his in-laws and friends who loved aviation and became mentors invested as well.
"It just started small and I guess we had a vision at the time that if we took care of our employees, our equipment and our customers, it ought to work out," he said.
And it did. Despite fierce competition for flight service in the region during the 1980s, Wings of Alaska went from two airplanes to 21. At one time during the early 1990s, the company had more than 120 employees.
Jacobsen, who still has part ownership of a separate summer tour operation called Wings Airways, sold the airline to step back from the daily stress of having people's lives in his hands, he said. If Beardsley and Fountain don't pay, Jacobsen and his partners want the agreement rescinded, which would give them the company back.
Beardsley is well known for renovating historic buildings in downtown Portland, where he bought his first building in 1966. He was hit hard when the bottom fell out of the commercial real estate market, he told The Oregonian in July, saying, "It's a very sobering time. ... This is significantly worse than the 1980s."
Beardsley told the newspaper that because of the recession, average rents dropped and vacancies in his office buildings jumped to 25 percent. He owned about two dozen buildings at the time.
In October, he put one of his companies into bankruptcy to avoid a foreclosure sale on a historic bank building. Fountain Village Development was placed into bankruptcy last month, reporting assets and liabilities between $50 million to $100 million, and listing 15 properties as principal assets including the Wings hangar.
According to the Wings complaint, Beardsley paid $580,000 in cash and put up several Oregon properties as collateral to purchase the hangar. Beardsley also personally guaranteed the deal, and Juneau lawyer Budd Simpson said his clients would pursue that guarantee since Beardsley has not personally filed for bankruptcy.
Beardsley owes nothing on the deal, said Jim Waldon, a Seattle attorney representing Beardsley's firm, because Jacobsen and his partners now own the Oregon properties.
Jacobsen executed an option in the sale agreement to require Beardsley buy the Oregon property back, but Jacobsen "sat on the documents" and did not take required actions in time, Waldon said, speaking for Beardsley.
Simpson called that an "excuse" for nonpayment. "The thing the Jacobsens do not want is the Oregon properties because they were always intended to be collateral," Simpson said.
Simpson also has represented the Juneau Empire in the past.
Simpson said he is banking on Beardsley's SeaPort Airlines to be a motivator for payment, since the airline can't run without the FAA operating certificates it obtained from buying Wings.
SeaPort started flying in 2008, serving business travelers with daily flights to Seattle and small Oregon airports in Newport, Astoria and Pendleton. It grew by winning bids for government subsidies to serve rural areas, then expanded in Arkansas with a similar contract.
Beardsley told The Oregonian in a story about the latest bankruptcy filing that his creditors "will definitely get paid every dollar." Through his lawyer, he said SeaPort is doing well, and will continue to operate Wings of Alaska.
Contact reporter Kim Marquis at 523-2279 or email@example.com.
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